The economic sanctions imposed by the Russian Federation on Turkey, following the shutdown of a Russian airplane by the Turkish Army, have revealed an inconvenient truth: the “peaceful era” that Eurasia have known for a decade is ending.
The two main sectors that could be
damaged are tourism and energy. But the appearance of this rivalry could have a
knock on effect, not only of Turkish and Russian populations but also on all of
Eurasia. In this context, we may wonder if Russia could allow itself to begin a
new economic war ?
If we take
a look at the historical relationships that unite these political powers, this
scenario seems unimaginable. Indeed, the two countries appear to be
economically and politically interdependent.
2000’s
decade has been a period deeply emphasized by the born, then a reinforcement of
strong financial partnerships through ambitious free trade agreements such as
food‘s imports treaties. Since 1997, date of the creation of BSTDB (Black Sea
Trade and Development Bank) that both countries joined, Turkey became
the second most important foreign trading partner after Germany.
In 2010,
President Medvedev and Erdogan (who still held the function of Prime Minister
at this period) signed 17 agreements to enhance cooperation’s in energies and
economic fields. Among them, a treaty planned the implementation of Akkuyu
plant, which should become the first nuclear power plant in Turkey. ROSATOM, a
Russian state-corporation has been elected to be the builder.
One of the main topic that prevails
about these escalating diplomatic tensions is the Turkish Stream project. This
natural gas pipeline building project was announced in December 2014 by
Vladimir Putin following the cancellation of South Stream Project (with
Ukraine). Its aim was to provide gas to Western Europe through Turkish-Greek
border. Turkish Stream has to complete Blue Stream, a trans-Black Sea pipeline
built in 2003 by Gazprom and BOTAS. The large expansion of the quantity of
Russian gas supplied Europe since the 1991 has allowed Turkey to become a
reliable transit partner.
Despite of the increase of bilateral
treaties, regional cooperation has not allowed Putin and Erdogan to reach all
their ambitions. EU sanctions over Russia after military’s intervention in
Crimea, and military’s intervention in Syria have slow down many of their
economic development programs. At the Turkish side, the low rhythm of Akkuyu’s
building, scheduled on 2020, is a huge constraint: domestic energy sources
(hydraulic energy and coal) are still limited which make the country highly
dependent on imports of oil and gas for electricity’s production. Turkish
electricity’s demand rate has been one of the highest of Eurasia these last
years even if Turkish population growth rate seems slowly downing.
At first
glance, we could think that a new rivalry of two major Black Sea’s regional
political power, could weaken anti-Western alliances that emerged these last
decade and tip the balance of power in favor of European Union and the United
States. The new containment strategy that consists of isolating Putin (and
China) by depriving him most of his (potential) allies seems to work.
Furthermore, as a NATO member, a European Union member candidate and also US
ally in the Middle East, Turkey has no other choices but to refrain Putin’s
operations in the region in order to guarantee the trust of its Western allies.
On second
thoughts, we should remind that EU has still to worry about its dependence on
Russian gas resources that it completely failed to reduce. As an example, the
TAFTA, which was destined to counterbalance EU’s gas dependence on Russia by
diversifying new energy sources, is not ready at all. Transatlantic trade
partnership arose numerous criticisms from some NGO’s or political figures who
insist on how environmentally risky shale gas extraction and carbon gas storage
would be for French soils, especially their large agricultural lands. Another
“alternative”, the Algerian gas’s transport, would not be viable and could
become too expensive on the long run.
Last but
not least, Erdogan and Putin’s several attempts to reinforce economic
partnerships with China reveals how crucial being part of Chinese market has
become. On one hand, China’s billion consumers provide a very long term source
of revenues for Russian firms; on the other hand Sino-Turkish military
cooperation has amplified the modernization of Turkish armed forces. The
pressure US puts on Erdogan to progressively move away from BRICS is obviously
ineffective. Running on from their common involvement in Silk Road Belt’s
initiative, Ankara discussed with Beijing last July about the possibility of
giving up dollars in bilateral trade and replacing it by national currencies
(lira and yuan). Assuming that this initiative materializes itself in a near
future, this would echo to Sino-Russian deal made last year which bypassed the
dollar as trade currency. Despite of their tumultuous relationships, Russia,
Turkey, are, with Chinese help, taking the same path : putting an end on US
monetary and financial global hegemony.
Sources
- Against the Dollar: China, Turkey Want to Trade in National Currencies, Sputnik News
- China, Russia and the Still-Almighty Dollar, US News
- Russia-Turkey annual trade could reach $100bn, RT Business
- Russia and Turkey agree on visa-free travel, RT Business
- Russia looks to punish Turkey for downing warplane by cutting economic ties, investments, US News
- Turkey - Russia tensions: 4 reasons neither country can afford a trade war, CNN
- Turkey Suddenly Remembers It's Part of NATO and Decides Not to Buy Chinese Weapons, Vice News
- "Turkish Stream and Russian gas" (picture), oilprice.com
